Английское морское и коммерческое право

Английский прецедент

Юридические услуги, консультации

ДЕЛО "ASIA STAR"

Бывает так, что судовладельцы отказываются исполнять чартер партию. Причины могут быть разные. Судно просто не подается под погрузку. Фрахтователь вынужден искать субститут и решать свои проблемы самостоятельно. Как можно наказать хитрого “овнера”? Какие требования могут лечь в основу иска к судовладельцу? Есть ли смысл арбитрировать в таких случаях? Мы не собираемся отвечать на эти вопросы здесь. Это предмет тщательного анализа конкретной ситуации. Тем не менее, мы публикуем мнение сингапургских коллег на этот счет. Читайте. Делайте для себя выводы. Эту тему мы постараемся развивать и в будущих публикациях…

ВЕРХОВНЫЙ СУД СИНГАПУРА
17 апреля 2009 года
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THE „ASIA STAR“
«АЗИЯ СТАР»
[2009] SGHC 91
Слушала судья Джудит Пракаш

Убытки – Уменьшение убытков – Фрахтователи не смогли погрузить судно в установленные сроки, по причине задержки судна и невозможности получить груз – Фрахтователи требуют компенсации за упущенную выгоду и убытки за неотгруженный товар или за опоздание в отгрузке – Имелся ли убыток у фрахтователей – Разумно ли фрахтователи уменьшили свои убытки – Меры по компенсации убытков

Damages – Mitigation – Charterers unable to load cargo within agreed shipment period by reason of vessel’s delay and unsuitability to receive cargo – Charterers claiming loss of profits and damages in respect of cargo not shipped or delayed shipment – Whether charterers suffered loss – Whether charterers reasonably mitigated their loss – Measure of damages recoverable

В ноябре 2003 года фрахтователи истцы зафрахтовали судно «Азия Стар» у ответчиков судовладельцев для перевозки минимум 21500 тонн рафинированного пальмового масла в Турцию. Договорный период для отгрузки с 27 декабря 2003 по 4 января 2004 года был продлен впоследствии до 15 января 2004 года.

В действительности «Азия Стар» пришвартовалась к причалу порта погрузки только 19 января 2004 года. В этот день трюма судна были признаны непригодными для погрузки. Фрахтователи отказались от этого судна и потребовали от ответчиков предоставления другого судна. Ответчики возразили, что у них нет выхода, как только расторгнуть контракт. На «Азия Стар» так и не было погружено никакого груза.

У фрахтователей был контракт на продажу пальмового масла турецким покупателям с отгрузкой не позже 15 января 2004 года. Фрахтователи закупили это масло у трех различных поставщиков на условиях, что судно «Азия Стар» будет подано под погрузку в период с 27 декабря 2003 года по 4 января 2004 года.

Рынок на пальмовое масло «шел вверх». Когда стало понятно, что прибытие «Азия Стар» задерживается, один из поставщиков сначала согласился продлить срок отгрузки до 15 января 2004 года, но впоследствии, расторг контракт, поскольку груз не смогли погрузить на судно 21 января 2004 года. Два других поставщика согласились продлить срок отгрузки по контрактам, чтобы груз можно было погрузить в другое судно, «Чембалк Барселона», в самом начале февраля 2004, но при условии, что фрахтователи оплатят различные дополнительные суммы. Более того, фрахтователи должны были оплатить своим покупателям убытки в сумме 823 800 долларов США за неотгрузку товара по контракту.

13 февраля 2004 года фрахтователи начали процесс против ответчиков, требуя компенсации убытков за нарушение контракта чартер партии, на том основании, что «Азия Стар» была в немореходном состоянии из-за проблем с трюмами. Судья вынес решение, что ответчики нарушили контракт и присудил истцам возмещение убытков.
При установлении размера убытков фрахтователи заявили следующие требования:
(а) упущенная выгода в сумме 698 889.88 долларов США, возникшая из-за расторжения контракта с поставщиком;
(б) 823 800 долларов США, которые фрахтователи должны были заплатить своим покупателям в качестве убытков; и
(в) различные дополнительные суммы, уплаченные двум другим поставщикам за продление срока отгрузки.

Помощник Судебного Распорядителя решил, что в связи с тем, что рынок продуктов пальмового масла в то время был на подъеме, возможный убыток фрахтователей от фрахтования судна «Пума» по первоначально предложенной ставке фрахта 27.50 долларов США за тонну, мог значительно снизить возможный ущерб у фрахтователей от расторжения контрактов. Помощник Судебного Распорядителя решил, что размер убытка фрахтователей составляет сумму 302 000 долларов США, полученную путем вычитания из суммы фрахта за «Пуму» (если бы он был заключен), суммы фрахта, которую фрахтователи должны были заплатить за «Азия Стар».

Обе стороны были не согласны с решением и обратились в апелляцию. Фрахтователи заявили, что Помощник Судебного Распорядителя допустил ошибку , решив, что они могли, но не уменьшили свои убытки, следовательно, убытки фрахтователям должны быть присуждены в заявленном размере. Ответчики заявили, что фрахтователи вообще не понесли никаких убытков.

Решено Верховным Судом Сингапура (Судья Джудит Пракаш), что апелляционное заявление фрахтователей принято к рассмотрению, а кросс апелляционная жалоба ответчиков отклонена.

(1) Помощник Судебного Распорядителя правомерно пришел к выводу , что фрахтователи понесли убытки из-за нарушения контракта со стороны ответчиков…
(2) Помощник Судебного Распорядителя допустил ошибку в вопросе об уменьшении убытков. Действовать разумно для уменьшения своих убытков не означает, что фрахтователи обязаны были без переговоров принять предложенные им условия судовладельцами «Пумы». Принципы уменьшения убытков не требуют от потерпевшей стороны принятия экстраординарных расходов или действий, отличающихся от нормальной деловой практики. В обычных деловых обстоятельствах фрахтователь судна будет торговаться с судовладельцем для того, чтобы получить наилучшие условия, имеющиеся рынке. Ответчики не представили никаких доказательств о том, какие превалирующие ставки фрахта и демерреджа предлагались 20 января 2004 года, или о том, что фрахтователи действовали неразумно, направляя свои предложения собственникам «Пумы».Тот факт, что последующие события показали, что фрахтователи потеряли бы меньше, если бы они зафрахтовали «Пуму», не означает, что они действовали неразумно в своих переговорах с собственниками «Пумы»…
Канадское дело Costello v Calgary (City) [1995] AR Lexis 5614 принято к сведению.
(3) Что касается размера убытков, то требования фрахтователей в пунктах (а) и (б) имеют отдаленную причинную связь. Обычный размер убытков , если судовладелец не исполнит контракт перевозки груза, устанавливается либо как разница между рыночной ставкой и ставкой фрахта по чартеру, либо путем обращения к вопросу о стоимости товаров в порту выгрузки. Альтернативно, когда фрахтователь был в состоянии отгрузить товар на другое судно, он получает право требовать возмещения дополнительных расходов, возникших в связи с этим у него. Фрахтователи не заявили никаких аргументов, доказывающих, что ответчики должны нести ответственность сверх обычно применяющихся правил. Соответственно, фрахтователи получают право на возмещение убытков, указанных в пунктах (а) и (б) , в размере, определяемом как разница между рыночной стоимостью данного товара в месте его доставки в Турции в момент, когджа он должен был быть доставлен туда, и стоимостью товара для фрахтователей во время и в месте отгрузки, с учетом соответствующих сэкономленных скидок. Фрахтователи имеют право на возмещение убытков по их требованию в пункте (в), основанном на экстра расходах, понесенных из-за задержки в отгрузке конкретного товара…
Дело Fyffes Group Ltd v Reefer Express Lines Pty Ltd (The Kriti Rex) [1996] 2 Lloyd’s Rep 171 принято к сведению.

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Слушалась апелляционная жалоба истца Pacific Inter – Link Sdn Bhd фрахтователей судна Asia Star на решение о размере убытков в котором Помощник Судебного Распорядителя решил, что истец не принял мер по уменьшению убытков после того, как согласился с существенным нарушением контракта, допущенным ответчиком судовладельцем судна. Ответчик подал кросс апелляционную жалобу, где он заявил о том, что истец не понес никаких убытков.

Prem Gurbani и R Govin, проинструктированы юридической конторой Gurbani & Co действовали в интересах истца. Thio Ying и Alan Loh, проинструктированные юридической конторой Kelvin Chia Partnership действовали в интересах ответчиков.

1. In November 2003 the plaintiff, Pacific Inter-Link Sdn Bhd, entered into a voyage charterparty with the defendant, the owner of the vessel Asia Star, by which it was agreed that the vessel would load a minimum cargo of 21,500 mt of refined palm oil for carriage to and delivery at ports in the Middle East/Turkey/Black Sea. On 19 January 2004 the vessel’s tanks were found to be unsuitable to receive the cargo and the plaintiff sent the defen dant a message the same day holding the defendant responsible for its breach of the charterparty in failing to provide a vessel with suitable tanks. No cargo was ever loaded on to the vessel.

2. On 13 February 2004 the plaintiff commenced this action against the defendant claiming damages for the breach of the charterparty. The defendant resisted the action vigorously and the question of liability duly went to trial. The trial judge found that the defendant was in breach of the contract. The defendant’s appeal against this decision was dismissed. The matter then went for assessment of damages. The plaintiff claimed the following as its loss and damage:
(a) Losses incurred on account of cancellation of sale contracts for the cargo by the plaintiff’s supplier PT Pacific Indomas (“Indomas”) US$698,889.88
(b) Claim by the plaintiff’s buyer Agrima Ic Ve Dis Ticaret Pazarlama Ltd (“Agrima”) as a result of the plaintiff’s failure to deliver contracted cargo US$823,800
© Penalty charges imposed by the plaintiff’s supplier PT Pacific Medan Industri (“Pamin”) for delay in loading US$209,990.83
(d) Various charges such as interest and storage, reprocessing, transportation and heating charges imposed by another supplier, Pacific Oil and Fats Industries Sdn Bhd (“Pacoil”) MYR558,467.31

3. The hearing of the assessment took place over several days before the Assistant Registrar. In his judgment, delivered in June 2008, the Assistant Registrar held that the plaintiff had failed to act reasonably to mitigate its loss and that it should have chartered an alternative vessel, Puma, to carry its cargo to the discharge ports. As a result, the Assistant Registrar disallowed all the items of the plaintiff’s claim. Instead, he held that the proper measure of damages to be awarded to the plaintiff would be the total amount of freight that it would have paid for the charter of Puma less the amount of freight which the plaintiff had contracted to pay the defendant for Asia Star. He calculated that amount as being US$302,000 and awarded this sum to the plaintiff as its damages. Subsequently, the Assistant Registrar ordered that the defendant was to bear 10 per cent of the plaintiff’s costs of the assessment of damages.

4. Both parties were dissatisfied with the award and have appealed. The plaintiff contends that the Assistant Registrar erred in his holding that it had failed to mitigate and that it should be awarded its damages as originally claimed. It also contends that in any event, the calculation of the freight differential between Asia Star and Puma was wrong, that the correct figure should be US$399,500, and that, additionally, it should be entitled to recover the sums that it had to pay to Pamin and Pacoil as expenses incurred for the delay in shipping the consignments it had bought from them and had intended to ship on Asia Star. The defendant’s stand is that the plaintiff did not suffer any damages at all and that its claim for damages should be dismissed. Alternatively, the plaintiff is entitled to nominal damages only. In addition, the defendant wants the costs of the assessment hearing before the Assistant Registrar to be awarded to it.

Фактические обстоятельства:

5. By various contracts made in November 2003, the plaintiff agreed to sell the following Malaysian and Indonesian edible oil products to Agrima, a trader in palm oil products in Turkey:

(a) 10,100 mt of palm oil;

(b) 3,500 mt of palm stearin;

© 5,750 mt of palm olein;

(d) 1,650 mt of palm kernel oil; and

(e) 500 mt of crude coconut oil.

The total quantity to be delivered to Agrima was, therefore, 21,500 mt. Under the contracts, the plaintiff had to ship the products between 15 December 2003 and 15 January 2004.

6. Between October and December 2003 the plaintiff purchased a total of 24,500 mt of palm oil and derivatives and crude coconut oil from three suppliers, Indomas, Pamin and Pacoil: 15,000 mt were purchased from Indomas, 5,750 mt were purchased from Pamin and 3,750 mt were purchased from Pacoil. The plaintiff’s case was that it had decided to ship all the oil from Pamin and Pacoil and 12,000 mt of the quantity purchased from Indomas to Agrima to fulfil its contracts with the latter. The plaintiff further contended that it had arranged for these cargoes to be carried on Asia Star. The agreed loading period in the charterparty was between 27 December 2003 and 4 January 2004 with the vessel to present itself at the plaintiff’s nominated load ports in Indonesia/ Malaysia during that period. The plaintiff subsequently nominated Belawan port in Indonesia and Pasir Gudang in Malaysia with the vessel to call at Belawan first.

7. On 1 December 2003 the plaintiff sent Indomas a shipping instruction telling it to load a total of 12,000 mt of various palm oil products on board Asia Star at Belawan. A similar instruction was given to Pamin on 12 December 2003 telling it to load 5,750 mt of cargo on the vessel at the same port. On the same day, the plaintiff instructed Pacoil to load its cargo of 3,750 mt on Asia Star at Pasir Gudang. In each of these shipping instructions, the “laycan” of the vessel (ie the period during which it was expected to be at the relevant port for loading) was said to be between 27 December 2003 and 4 January 2004.

8. Asia Star did not arrive at Belawan during the originally agreed laycan. The defendant then asked for the time for commencement of loading to be extended to 15 January 2004 and the plaintiff agreed to this request.

9. On 5 January 2004 Indomas informed the plaintiff that up till that date Asia Star had not arrived for loading. It asked for the correct estimated date of arrival of the vessel or, alternatively, the name of a substitute vessel on which the cargo could be loaded. The plaintiff replied immediately to inform Indomas that Asia Star had been delayed and would be arriving at Belawan very soon. The plaintiff asked for an extension of the shipment date up to 15 January 2004. Indomas accepted this request but asked that the vessel be presented for loading by 15 January 2004 as it had storage constraints in respect of the cargo purchased by the plaintiff. On 16 January 2004 a further letter from Indomas stated that Asia Star had still not arrived and that it had no option but to put the plaintiff on notice that it was holding the plaintiff to be in default of contract. The plaintiff then asked for a further extension of another week. In response, Indomas agreed “as a special case” to grant the plaintiff up to 21 January 2004 to lift the cargo and said that if this deadline was not met, it would hold the plaintiff to be in default and would cancel all its contracts for sale of the 12,000 mt of cargo. It should be noted that the price of palm oil products had increased since the contracts had been made with the plaintiff and that the market was still rising at this time.

10. In relation to Pamin, upon receipt of the plaintiff’s shipping instruction, it informed the plaintiff that it would not be held responsible and would charge the plaintiff if Asia Star arrived in January 2004 rather than in December 2003. When the vessel did not arrive by 5 January 2004, Pamin wrote a further letter to the plaintiff stating that it would be charging the plaintiff a penalty for the delay in shipment in accordance with the contract between them. The plaintiff asked Pamin to waive the penalty but Pamin did not agree to do so.

11. The third supplier, Pacoil, also complained about the failure of the vessel to call at the load port within the nominated laycan period. In its letter of 9 January 2004 it informed the plaintiff that it would not be responsible for any deterioration in the quality of the oil. Subsequently, Pacoil wrote again to reserve its rights to charge the plaintiff for heating, storage, interest and other costs that might arise due to the delay.

12. There was also communication between the plaintiff and Agrima in relation to the delay in the arrival of Asia Star. When it was clear that the vessel would not be able to load its cargo by the contractual shipment deadline of 15 January 2004, the plaintiff asked Agrima for an extension of the shipment deadline. It was granted an extension up to 21 January 2004.

13. In the meantime, the plaintiff had been communicating with the defendant on the cargo that it intended to load onto Asia Star. On 12 January 2004 it sent out a cargo nomination setting out the breakdown of the intended cargo and asked for the defendant’s confirmation as to whether the vessel could stow the cargo in accordance with this nomination. The master of the vessel responded by sending a revised stowage plan for the cargo nomination. Between 13 January 2004 and 19 January 2004, there were many email exchanges because the plaintiff made changes to its cargo nominations and in response the vessel changed the loading and stowage plans. On 18 January 2004 the plaintiff advised the master of Asia Star that its representative, one Mr Sharul, would board the vessel to discuss stowage plans.

14. The vessel berthed at Belawan on 19 January 2004. At about 09.00 that morning, the plaintiff’s appointed surveyors reported that the vessel’s tanks were not fit to load the cargo. Through its brokers, the plaintiff immediately gave notice to the defendant that it was unable to use Asia Star for carriage of its cargo due to the high possibility of contamination arising from the poor tank condition. While holding the defendant responsible for all delays, costs and consequences arising from this breach of contract, the plaintiff suggested that the defendant may substitute another vessel acceptable to it to carry out the voyage. That evening (at 18.24), the plaintiff’s broker received a reply from the defendant which stated, inter alia:

We are sorry to the findings by the surveyors as subject vessel loaded all kinds of vegoil and animal oil/fat during the past two years without any problems Due to this fact, we have no choice but to cancel this shipment with charterer. We already thought all other possible ways to rectify the situation but unfortunately the further tanks cleaning is doing no help to the coating. Further our other two small vessels Gold River/Silver River were all fixed with other cargo and they are all fully engaged in the near future, we are sorry to say that we are unable to substitute both ships to this shipment.

Anyway, we thanks to charterer for their efforts so far & for their patience. Hope we can further co-op with charterer again.

Await chtrs confirmation urgently, as to sail the vessel for other possible employment.

15. The plaintiff responded through its solicitors. The solicitors’ letter dated Monday 19 January 2004 put the defendant on notice that the vessel was unseaworthy by reason of the defective tanks.

16. On the evening of 20 January 2004 the defendant notified the plaintiff that, during the previous 24 hours, the defendant had done what it thought it could to improve the tanks’ condition. It invited the plaintiff to reinspect the tanks to determine whether the same could be accepted. The defendant stated that if the plaintiff did not carry out the inspection before 08.00, it would take the necessary steps to prevent further delay and to protect its own interest. The plaintiff did not respond to this invitation and on 21 January 2004 at about noon, the defendant noted the plaintiff’s lack of response and formally notified the plaintiff that it was withdrawing the vessel and would sail her away from Belawan immediately.

17. The plaintiff’s solicitors responded the same day. In their letter they asserted that the defendant’s message of 19 January 2004 made it clear that the defendant had terminated the charterparty. Further, by failing to make the vessel seaworthy and cargoworthy, the defendant had breached the terms of the charterparty and this breach had been accepted by the plaintiff. The solicitors also said that the plaintiff was searching for an alternative vessel and once the claims had been compiled, would take the necessary proceedings to recover its loss.

18. While all this was going on, the plaintiff had been searching for an alternative vessel. It first started looking when Asia Star did not meet the original laycan but was unable to find a vessel available for spot charter. On 19 January 2004 Sheik Abdul Malik Mohamed Kassim (“Mr Malik”), the head of chartering operations in the plaintiff asked his shipbroker, Mr Sivananthan Munusamy (“Mr Sivananthan”), of a company called Panasia Marine (Tankers) Pte Ltd (“Panasia”), to look out for a vessel to charter on an urgent basis which could pick up the cargo intended for shipment on Asia Star. The first response to this request was the offer, the same day, of a vessel called Mount MacKinney. This vessel was, however, not acceptable because its estimated date of arrival for loading was 3 or 4 February 2004 which was too late for the intended cargo.

19. On the night of 19 January 2004 Mr Sivananthan informed Mr Malik of another possible substitute vessel. This was Puma which had a cargo carrying capacity of 40,000 mt of cargo (almost double the carrying capacity of Asia Star). The owners of Puma indicated that it could start loading the cargo at Belawan by 27 or 28 January 2004 based on its estimated arrival date at Pasir Gudang of 26 or 27 January 2004. On 20 January 2004 the owners of Puma proposed a freight rate of US$27.50 per mt on the basis of one load port/one discharge port. There would be additional charges if a second load port and/or second discharge port were to be used. The demurrage quoted was US$17,000 per day.

20. On the evening of 20 January 2004 the plaintiff made a counterproposal to the owners of Puma. The main terms of the offer were as follows: the plaintiff would load a minimum cargo of 36,000 mt, the laycan would be between 25 and 31 January 2004, the freight would be US$25.50 per mt on the basis of one load/one discharge port and the plaintiff would pay further specified charges for additional load and discharge ports, and, finally, the demurrage was to be US$14,000 per day. According to Mr Malik, Puma would have been a commercially viable vessel for the plaintiff provided that the owner agreed to the rates for laytime, freight and demurrage proposed by him and the vessel was able to arrive at Belawan by 25 January 2004. The owners of Puma did not find the counter-offer attractive, however, and they did not respond to it. On 21 January 2004 Panasia tried to find another alternative ship but was not successful.

21. On 22 January 2004 Indomas cancelled all its sale contracts with the plaintiff on the basis that the plaintiff had not complied with the contractual shipment date. The plaintiff attempted to persuade Indomas to withdraw this cancellation and ship the cargo on the vessel Chembulk Barcelona which it had previously chartered to load cargo in early February. This request was refused. Indomas stated that it had space constraints and could not store the cargo for the plaintiff for an unspecified time. The plaintiff contended that it had suffered a loss of profit amounting to US$698,889.88 by reason of the cancellation of the Indomas contract. It computed its loss on the basis of the difference in contract prices between its purchase contracts with Indomas and its sale contracts with Agrima, after taking into account the expenses of shipping the cargo to Turkey and insuring it.

22. On 23 January 2004 Agrima informed the plaintiff that it intended to cancel the bulk of the purchase contracts which had been due for shipment on Asia Star. Agrima informed the plaintiff that it had required the cargo urgently and would be looking for replacement cargo from sources within Turkey. The plaintiff requested Agrima to agree to shipment of the cargo on Chembulk Barcelona in February but Agrima agreed only to 5,750 mt of palm oil being shipped on Chembulk Barcelona. It bought 4,000 mt of RBD palm oil from the domestic Turkish market and cancelled the contracts in respect of the remaining 11,750 mt of cargo. Agrima then made a claim against the plaintiff for the additional cost of procuring cargo in Turkey to supply to its sub-purchasers. The original claim was US$969,200 but after negotiation Agrima agreed to reduce its claim to US$823,800. The plaintiff claimed reimbursement of this sum from the defendant.

23. As for Pamin and Pacoil, they agreed to extend the shipment date even after Asia Star failed its inspection. They agreed also that the cargo could be shipped on Chembulk Barcelona in early February 2004. These agreements were not free, however. Pamin required the plaintiff to pay all additional storage costs, heating costs and other expenses arising from the delayed shipment including interest under the terms of the contracts between them. The plaintiff negotiated with Pamin and managed to reduce the storage costs by one third. In the event the total amount claimed by Pamin from the plaintiff was US$209,990.83. As for Pacoil, it also required the plaintiff to pay additional charges under the contracts. Further, due to the delay in shipment, the quality of the cargo had deteriorated and it had to be reprocessed to bring it back to its original condition. Costs were sustained. The total loss arising from the delayed shipment of the Pacoil cargo was MYR$558,467.31.

Measure of damages

79. I now move to consider the issues of the correct measure of damages to be applied and remoteness.

80. To recap, the plaintiff’s claim is for:

(a) loss of profits on the cancellation of the Indomas contracts in the total sum of US$698,889.88;

(b) the sum of US$823,800 which the plaintiff allegedly paid to Agrima as damages; and

© various amounts paid to Pacoil and Pamin for the delayed shipment of their cargoes.

The first question that arises is whether as a matter of law the plaintiff is entitled to recover the sums claimed under paras (a) and (b) above. The defendant’s submission is that the plaintiff cannot do so because these two claims are too remote and cannot be recovered under established principles.

81. The usual measure of damages applicable when a shipowner fails to carry out a contract to carry a cargo is either the difference between the market and charter rates of freight or relates to the value of the goods at the port of discharge. Alter natively, where the charterer has been able to load the goods on another vessel, he is entitled to claim the costs incurred in so doing. The legal basis of these principles was well discussed by Moore-Bick J in Fyffes Group Ltd v Reefer Express Lines Pty Ltd (The Kriti Rex) [1996] 2 Lloyd’s Rep 171. At pages 192 and 193, the judge said:

I start from the principle that [the charterers] are entitled to recover the loss which flows naturally in the ordinary course of events from the breach of contract. In the case of a contract for the carriage of goods by sea the natural and obvious consequence of the shipowner’s failure to load and carry the cargo is that the owner of the goods is deprived of the benefit of having them at the agreed destination when they ought to have arrived. Prima facie, therefore, the loss he suffers is represented by the market value of the goods at that time and place. However, he may be able to avoid or reduce that loss in one of two ways. If alternative shipping space can be obtained he may be able to mitigate his loss by having the goods carried by another vessel, in which case his loss will be confined to any additional cost of carriage and other expenses as well as any loss caused by the delay to the goods reaching their destination. Alternatively, he may be able to obtain substitute goods at the port of destination, in which case his loss will be measured by the cost of so doing, less the value of the goods left at the port of loading and expenses saved in connection with their transport. That does not mean, however, that in either case the sound arrived value of the goods does not remain the starting point for assessing damages, subject to the duty to mitigate.

As the judge pointed out, his summary of the law was supported by the authorities to which he was referred including the then current edition of McGregor on Damages, the case of Nissho Co Ltd v Livanos (1941) 69 Ll L Rep 125 and A/S D/S Heimdal v Questier & Co Ltd (1948) 82 Ll L Rep 452. That there has been no change in those basic principles since 1996 when The Kriti Rex was decided is borne out by the 2003 edition of McGregor on Damages which states at para 27-047:

Where the defendant has failed to carry the goods at all or has carried them to the wrong place, two alternative measures appear to be open to the claimant to put him in the position he would have been in had the carriage contract been performed. First, he may engage substitute transport to get the goods to the contractual place for delivery and claim as damages the cost of so doing less the price he would have paid under the contract with the defendant, ie market rate of freight less contract rate of freight, and in addition the amount by which the price at the place of delivery has fallen between the contractual time for delivery and the arrival of the goods by the substitute transport when this is necessarily later. Or, secondly, he may buy similar goods at the contractual place for delivery and claim the cost of so replacing less the sum of the value of the goods at the place of loading, the amount of freight and the amount of insurance.

McGregor also makes clear in the paragraphs that follow that the first measure is the relevant one where the second course of action is not open to the claimant because no market exists at the place of delivery in which he can buy replacements and the second measure is the relevant one where the first course of action is not open to the claimant because no suitable substitute transport is available. The same edition of McGregor also expressly endorses the decision reached in The Kriti Rex.

82. The defendant argued that because there was an available market in Turkey for the cargoes in question, the plaintiff was not entitled to claim its loss of profit in respect of the cancelled Indomas cargoes or to recover the damages it asserted it had had to pay Agrima. In support, the defendant cited Rodocanachi Sons & Co v Milburn Brothers (1886) 18 QBD 67, The Arpad (1934) 49 Ll L Rep 313; [1934] P 189, Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase) [1981] 1 Lloyd’s Rep 175 and various other cases. In Heskell v Continental Express Ltd (1949) 83 Ll L Rep 438, Devlin J, when considering whether a carrier who failed to deliver goods should be responsible for the injured shipper’s loss of profits arising from a sub-sale or liability to damages in respect thereof, stated (at page 459 col 1):

I think that a distinction may fairly be drawn between carriage by land and carriage by sea. In the latter case, export and import is generally conducted by means of a sale; and the type of contract generally used, cif or fob, usually requires shipment by a particular ship or at a particular time. Accordingly, [counsel for the plaintiff] invites me to hold that Continental Express should have known that the process of exporting or importing would probably involve a contract of this type, and to say that if Continental Express knew that, it would follow that they must appreciate that a failure on their part to carry out their delivery instructions might well result in the plaintiff becoming liable to a third party. Lord Macnaghten in Stroms v Hutchinson (¹⁹⁰⁵ AC 524) seems to think that this degree of knowledge should be imputed to the carrier as an ordinary business man.

I think that the decision in The Arpad [1934] P 189; (1934) 49 Ll L Rep 313 and the earlier authorities referred to in it, preclude me from taking this view of a carrier’s liability. I am, for my part, willing to hold that a carrier should recognise sub-sales by a consignor or consignee as a serious possibility. But that is not enough, as the leading case of Horne v Midland Railway Company shows. In The Arpad Maugham LJ, said:

“I suppose most vendors of goods and most carriers might be taken to know that if the purchaser or consignee is a trader the goods will probably be sold, or are bought for sub-sale, but the authorities seem to show conclusively that something more than that is necessary to enable the damages to be assessed by reference to a contract of sub-sale entered into before the date of delivery.”

Under the ordinary rule the carrier is taken to know that the consignor will lose by non-delivery the value of the goods at the place of delivery, and I suppose that under ordinary market conditions that would compensate the consignee for any loss he incurs by purchases made at the place of delivery in order to fulfil any sale he may have made. To make the carrier liable for any higher measure of damages it seems to me to be necessary that he should have knowledge, actual or imputed, of something that makes the ordinary measure inadequate. Such knowledge may be derivable from the terms of the subcontract, or, possibly, from the market conditions at the place of delivery. The reason why, as noted by Asquith LJ, in Victoria Laundry (Windsor) Ltd v Newman Industries Ltd (¹⁹⁴⁹ 1 All ER 1001) the law is more ready to allow loss of profit as an item of damage against a vendor than against a carrier is because of the nature of the vendor’s business. This is more likely to give him knowledge of the probable terms of a sub-contract or of the market conditions.

It would be noted from the above extract that where a claim against a carrier is concerned the law does not generally allow the shipper to claim loss of profit as an item of damage unless he is able to show that the carrier had knowledge, actual or imputed, of something that made the ordinary measure of damages inadequate.

83. The plaintiff accepted the general rule as set out above. It contended that in this case there were factors that displaced the ordinary rule. It was submitted that it was within the reasonable contemplation of the defendant at the time that its charter with the plaintiff was concluded that Indonesia and Malaysia are the largest producers and exporters of palm oil and that palm oil is a trade of commodity. The plaintiff further submitted that it would be within the defendant’s knowledge at this time that the plaintiff is a Malaysian company and was in all probability selling or had sold the cargo to buyers in one or more of the foreign destinations named in the charter to which the plaintiff intended to ship the cargo. The fact that the plaintiff was loading part of the cargo in Indonesia also indicated that it would be within the defendant’s reasonable contemplation that the plaintiff had bought the cargo from suppliers in Indonesia. It did not matter that the defendant might not have been aware of the actual terms of the plaintiff’s purchase and resale contracts or may not have sighted the contracts. It followed that the defendant would be aware or it would be within the defendant’s reasonable contemplation, at the time of concluding the charter, that if the defendant breached the charter by failing to tender a suitable ship to load the plaintiff’s cargo, the plaintiff would suffer a loss of profits from non-shipment of the cargo as well as face claims from its suppliers at the load port and its buyers at the discharge port. The plaintiff’s expert witness, Mr Dennis Butler, testifying from the perspective of a local shipowner in the palm oil carriage trade, opined that the shipowner would be aware that a charterer like the plaintiff would have bought the cargoes from suppliers in Indonesia or Malaysia and on-sold to buyers at the destination ports. Further, the plaintiff argued that the evidence of Mr Shah showed that even he would expect the defendant to be aware that the plaintiff would have bought the cargo from suppliers at the loadports and on-sold it to buyers at the discharge port.

84. I do not accept the plaintiff’s submissions summarised above. The plaintiff has not proved any special knowledge on the part of the defendant that would take its responsibility for damages out of the ordinary rule. Shipowners obviously know that persons who charter their vessels to carry cargo from one port to another are likely to be trading in such cargo and will suffer loss if the cargo is not loaded in accordance with the charter. That of itself cannot impose liability for the specific loss incurred by cancellation of the charterer’s subsales. The circumstances which the plaintiff adverted to as showing special knowledge were only matters of general knowledge and fell within the dictum of Maugham LJ in The Arpad quoted in para 82 above. There was no evidence that the defendant had knowledge, actual or imputed, of something which made the ordinary measure inadequate. Further, as the defendant submitted, the plaintiff was unable to show what special factor it was that existed in this case which would make it wrong to follow the ordinary measure of damages. Even if the defendant should have been aware that the plaintiff is a trader in the palm oil business, there was no evidence that it knew how the plaintiff carried on its business, ie that it entered into its purchase and resale contracts on a forward basis rather than a spot basis or how it matched its purchase contracts with its resale contracts. Mr Shah had also testified that oil palm trading is speculative in nature and no one would know whether any particular trader would sell cargo immediately or hold on to it for some time and, if the latter, for how long or whether the trader would even have made a profit on the transaction. In this case, only half of the Agrima contracts were concluded by 15 November 2003 and the Indomas contracts were not specifically nominated for shipment on board Asia Star until 1 December 2003. Accordingly, as of 15 November 2003 when the Asia Star charter was concluded, the defendant could not reasonably have contemplated the losses that actually arose from its breach of contract. Further, RKN had testified that since the plaintiff has a large quantity of cargo available for shipment during any particular period, at the time of the charter the plaintiff would not have decided on the port(s) of discharge or the cargo to be shipped on board Asia Star.

85. Accordingly, I hold that the plaintiff is not entitled to recover damages on the basis of its loss of profits in respect of the cancelled Indomas contracts or on the basis of the damages that it had to pay Agrima for failing to deliver cargo by mid-February 2004. Instead the ordinary measure of damages applies and I now turn to consider what the plaintiff should be entitled to recover on this basis in respect of that portion of the cargo which was cancelled by Indomas and Agrima and could not be shipped by Chembulk Barcelona.

86. On the facts of this case, the ordinary measure of damages would be the difference between the market value of the cargo at its destination in Turkey at the time it ought to have arrived less the value of the cargo to the plaintiff at the agreed time and place of shipment with appropriate deductions for expenses saved such as freight and cargo insurance premium.

87. I shall consider each element. First one has to establish the market value of the cargo at its destination. If Asia Star had commenced loading the cargo in Belawan in 19 January 2004, the vessel could not have arrived at the first discharge port in Turkey earlier than mid-February 2004 given that it would have taken a few days for the vessel to load cargo at both Belawan and Pasir Gudang and the voyage itself would have taken 20 to 22 days. The plaintiff called an expert witness, one Mr Ferhan from a well-known trading house in Turkey, to testify as to the market prices of palm oil products in Turkey in February 2004. His evidence was based on record of prices for similar cargo kept by his company. He also mentioned that his evidence of the market price for the cargo could be counter-checked with Reuters’ Malaysian fob prices plus US$60/- per tonne for freight and insurance including Malaysian sellers’ profit (and another US$20/- to US$30/- per tonne for the spot purchase premium). The defendant did not call any expert evidence on the actual market prices of the various commodities in Turkey. The Turkish prices therefore have to be gleaned from the evidence of Mr Ferhan and Ms Isinsu.

88. The plaintiff introduced Mr Ferhan’s evidence not for the purpose of using his mid/third week February 2004 market prices to calculate damages due to the plaintiff but to prove that the oil palm market was a rising market in January 2004 with prices expected to go higher in February 2004 and to show that the plaintiff’s settlement of Agrima’s claim was done to mitigate loss. Nevertheless this is the evidence before the court on Turkish market prices and the court is entitled to rely on it for the purpose of assessing the damages payable to the plaintiff. Mr Ferhan gave a range of prices for the various products in the month of February 2004. These were cif prices on a per tonne basis. He also said that spot market prices would be, per tonne, between US$20 and US$30 higher than the cif prices. The plaintiff was so focused on recovering special damages that it did not give me a calculation of what its damages would have been if calculated on the ordinary basis. As far as the market price in Turkey is concerned, I consider that this should be the average spot market price calculated on the basis of US$20 above the average cif price for the product concerned during the weeks beginning 10 February 2004 and 17 February 2004.

89. The defendant submitted that the price should be ascertained as of 22 January 2004 as Ms Isinsu accepted that date as the date of default. I do not agree: taking 22 January 2004 as the calculation date would not comply with the ordinary rule which requires the damages to be assessed on the basis of the value of the goods at the place of delivery at the time when they ought to have been delivered. It is for that reason too that I hold that it is the spot value in Turkey that has to be used. If the goods had been delivered in mid-February 2004 and there had been no pre-existing contract for their sale or such contract had been cancelled, the plaintiff would have been able to sell the goods in Turkey, which had a ready market for the same, at their spot value and therefore the spot value reflected the value of the goods to the plaintiff at the time of delivery. The fact that the spot value reflects a profit margin does not detract from its use. Traders are expected to trade on a profit margin and the prevailing market price in any market will usually include an element of profit. In this particular case, all the evidence showed that the market for palm oil products was moving upwards at the material time and in such circumstances no trader would have wanted, or been required, to forgo his profit in order to get rid of his stock. As the plaintiff submitted, under the ordinary measure of damages, the market price of the cargo at destination at the time it ought to arrive there conceptually refers to the prevailing price in that market at time for delivery at that time it ought to arrive, and not for delivery at a later point of time. Hence, the market price conceptually refers to a spot price for purchase and delivery at the time the cargo ought to arrive at the destination. This position is confirmed by the case of C Sharpe & Co Ltd v Nosawa & Co [1917] 2 KB 814 where merchants in Japan sold goods to be shipped in June at the price including cost, freight and insurance to London. Shipping documents relating to the last possible shipment in June would have reached London on 21 July and the goods themselves would have arrived on 30 August. The goods were not shipped and the buyers sued for non-delivery. It was held that the delivery intended by the contract was a constructive delivery by tender of the shipping documents and there was a breach of contract on 21 July. The damages would be measured by the difference between the contract price and the market price on 21 July and since it was impossible to buy similar goods coming forward on a June shipment but possible to buy such goods on the spot, a merchant in the circumstances acting reasonably would have bought goods on the spot and the price of such goods should be regarded in measuring the damages.

90. The next point to be considered is how the value of the cargo to the plaintiff at the place and time of shipment is to be calculated. The defendant’s submission was that the value of the cargo to the plaintiff at the time of shipment should be the market value at the load port between 19 and 21 January 2004. The plaintiff disagreed on the basis that the original laycan in the charter was between 27 December 2003 and 4 January 2004 and the defendant had breached the charter by failing to meet the original laycan. When the plaintiff extended the time for laycan to 15 January 2004, it did not tell the defendant that it was waiving its right to damages for the breach. Thus the original time of shipment had to be used for the calculation of damages rather than the extended time of shipment. It contended that its contracts with Indomas would evidence the market price of the cargo at the time of the original laycan. I am not sure that I agree with the plaintiff’s argument because if the date of the original laycan were to be taken as the date for measuring the value of the goods on shipment, then one would also have to calculate the loading and voyage time from that date to ascertain the date when the goods ought to have been delivered to obtain the second price to determine damages. As I have found mid-February to be the date when the goods ought to have been delivered, I cannot accept the laycan of 27 December 2003 to 4 January 2004 as the time for ascertaining the value on shipment.

91. I do not agree, either, with the defendant’s argument that the shipment value should be ascertained as at 19 to 21 January 2004. This is because the consequence of the non-shipment was not that the plaintiff still had cargo which it could sell to another third party, but that its seller Indomas cancelled its contract with the plaintiff so that the plaintiff lost the benefit of the agreed contractual purchase price for that 12,000 tonnes. I therefore agree with the plaintiff, albeit on a different ground, that the value of the cargo as at the time and place of shipment should be calculated on the basis of the contract price between the defendant and Indomas.

92. The next issue relates to the plaintiff’s claim referred to in para 80© above to recover as damages the extra amounts that it paid to Pacoil and Pamin as costs of the extra expenses incurred by reason of the delay in the shipment of the cargoes supplied by these two suppliers. These sums amount to US$209,990.83 for Pamin and MYR$558,467.31 for Pacoil. The principle on which these claims were made is the alternative measure of damages which I have cited in para 81 above.

93. Dealing first with the Pamin amount, the plaintiff submitted that the computation of the claim made by Pamin was purely mathematical and based on the PORAM standard terms of contract which were incorporated into Pamin’s contract with the plaintiff. Mr Butler, who was a chartering manager in a major parcel tanker shipowner’s office for over 20 years, testified that the Palm Oil Refiners Association of Malaysia (PORAM) has rules that regulate the sale and trade of palm oil products. He set out in his affidavit the standard late shipment penalty clause that is found in the PORAM fob contract. He also testified that the purpose of this clause is to deal with the damages and compensation that will be payable in the event of delays encountered in the readiness of the ship to load the cargo. Such a provision would standardise the trade and create some degree of certainty about what damages are payable for late shipment and how they are to be arrived at.

94. The amount of US$209,990.83 which the plaintiff paid Pamin was made up of three components: penalty charges, interest and storage charges.

95. The penalty charged was based on clause 5 of the PORAM terms. Entitled “Extension of Shipment”, it provides for penalty charges calculated at varying rates to be paid by a buyer who asks the shipper for an extension of the shipment date. On 5 January 2004 Pamin informed the plaintiff that it would be charging it a penalty of 1 and a half per cent of the contract price should the vessel call after 8 January 2004. Pamin also stated that if the vessel was delayed beyond 8 January 2004, it would charge the plaintiff an additional penalty of 1 and a half per cent over and above the first penalty. Subsequently on 27 January 2004 Pamin informed the plaintiff that because the shipment was slipping into another month, it was going to charge the plaintiff an additional penalty of 1 and a half per cent and if loading was not completed by 7 February 2004, there would be another additional penalty of 1 and a half per cent. On 11 February 2004 Pamin stated that as Chembulk Barcelona had completed loading on 9 February 2004, the penalty would be compounded to 1 and a half per cent + 1 and a half per cent for January 2004 and 1 and a half per cent + 1 and a half per cent for February 2004 plus interest for one month at 18 per cent per annum. This communication was followed by Pamin’s debit notes which reflected penalty of US$39,562.50 for the first eight days in January 2004, penalty of US$40,155.95 for a further eight days in January 2004, penalty of US$40,758.92 for the first eight days of February 2004 and penalty of US$41,369.65 for the further delay after 8 February 2004. The plaintiff contended that it had paid Pamin all the amounts charged against it as penalty and should be allowed to recover the same from the defendant.

96. The defendant argued that the plaintiff was not entitled to recover the penalty paid for two reasons. The first was that this alleged loss arose only from the delay of Asia Star and not the breach for which the defendant was found liable, ie its failure to provide a seaworthy vessel with suitable cargo tanks. The plaintiff had agreed to extend the laycan to 15 January 2004 at the defendant’s request and therefore the delay of Asia Star was not treated as a breach. The plaintiff agreed to the extension of the laycan knowing the shipment period of the Pamin contract and therefore any additional charges imposed by Pamin in respect of the period up to 15 January 2004 was not caused by the defendant and such loss cannot be visited on it. I accept this argument in respect of loss incurred before 15 January 2004. I do not accept it in respect of loss incurred when the vessel turned out to be unseaworthy. The defendant is responsible for loss sustained after 19 January 2004.

97. The second argument was that clause 5 of the PORAM terms does not prescribe the penalty charges beyond eight days. The defendant said that in the present case, the first eight days would have been from 22 January to 31 January 2004. The computation started unjustifiably from 1 January 2004 and there was also no basis for adding another 1 and a half per cent to the contract price after the first eight days. Further, the parties did not appear to have agreed on the amount of penalty charges beyond January 2004. It was only Pamin who imposed such charges unilaterally without contractual basis.

98 Clause 5 of the PORAM terms reads as follows:

At the request of Buyer, the period of shipment shall be extended by an additional period not exceeding eight (8) calendar days provided notice is given to Seller of his intention to claim such extension on or before the last shipment day of the contract period. Buyer shall provide satisfactory evidence that such delayed vessel was originally booked with layday/cancelling within the original contract period.

For such late shipment, Buyer shall pay a penalty to Seller for late presentation of vessel as follows:

1Ѕ% for 1,2, 3, or 4 days

1% for 5 or 6 days

1Ѕ% for 7 or 8 days

Should Buyer claim the Extension of Shipment Clause and the vessel fails to complete loading within such eight (8) calendar days, the original contract period shall be deemed to have been extended by eight (8) calendar days and the contract price increased by 1Ѕ%. On the determination of penalty, the extended day shall be on the basis of completion of loading.

99. Construing that clause as best as I can, it appears to me that, assuming the period of shipment was to start on 15 January 2004 as contemplated by the extended laycan requested by the defendant, under its contract with Pamin the plaintiff was liable to pay up to 1 and a half per cent of the purchase price as penalty if the plaintiff did not present the vessel for loading within seven to eight days of the extended shipment period. Additionally even if the ship was presented within those seven to eight days, if loading was not completed within the eight-day period the contract price would be increased by a further 1 and a half per cent. In this case the vessel was not presented by 23 January 2004 (ie within eight days of 15 January 2004) and loading was not completed by that date. Accordingly under its contract with Pamin, I consider that the plaintiff would have been liable to pay Pamin a total penalty of 3 per cent of the contract price. That is all, however, as the clause does not provide for additional penalties when the shipment period slips from one month into another and there was no agreement between Pamin and the plaintiff as to the extra charges prior to completion of loading on Chembulk Barcelona. It was only after all the cargo was on that vessel that Pamin sent its debit notes for penalty interest to the plaintiff. The plaintiff could then have taken issue with the fact that it was charged four sets of penalty interest when, at the most, the contract appeared to contemplate not more than two sets of such charges being incurred. The fact that the plaintiff did not argue with Pamin but paid all the charges does not entitle it to full recovery of the same from the defendant. The plaintiff is only entitled to recover 3 per cent of its contract price with Pamin as an expense incurred by reason of the delayed shipment occasioned by the unsuitability of Asia Star since that was the amount it was contractually obliged to pay.

100. The next component of the payment to Pamin was the interest charged. It is not clear on what basis Pamin claimed interest on the contract price. By clause 3(iii) of the PORAM terms, if the originally nominated vessel is delayed (within the contracted period) beyond the originally expected time of readiness to load by more than 72 hours, the buyer has to bear all additional costs incurred including interest. This clause cannot have been the basis of Pamin’s claim since the delay fell outside the contracted period. Then the other possible clause is clause 13 which reads:

If payment is not made by due date, interest shall be payable at the rate of 1Ѕ % per month.

In its debit note dated 12 February 2004 Pamin charged the plaintiff a total sum of US$19,733.61 being “interest charges @ 18% for one month”. This debit note was followed by a letter of 16 February 2004 in which Pamin explained the total charges and the rebates that it had given to the plaintiff at the plaintiff’s request. In respect of interest, the total interest payable for the period of 32 days as calculated by Pamin was US$42,200 before the application of the rebate and the rebate given was about 50 per cent. Going by the rate of 18 per cent used, it would appear that Pamin was relying on clause 13.

101. The payment term of the sales contract between Pamin and the plaintiff was that the full price of the cargo was to be paid in cash against the original shipping documents. Therefore payment was only due upon shipment and presentation of documents. The term “due date” in clause 13 can only refer to the date on which the documents were presented. In this case, the presentation of documents would only have taken place after shipment on Chembulk Barcelona and interest under clause 13 would not accrue before then. Therefore, there was no basis on which before that date Pamin could charge the plaintiff interest for the delay in shipment. Its remedy for the delay was to charge the penalty payable under clause 5. It did this and thus the interest charged was a double claim. The plaintiff should not have paid it and cannot recover it from the defendant.

102. The next component of the amount paid to Pamin was the storage charge. Initially Pamin charged US$9.00 per mt of cargo for the entire period of the delay in shipment. The defendant had contended that since Pamin bought its oil from other suppliers there should be storage charge claims from those suppliers. The evidence of Mr Ali Sulaiman of Pamin was, however, that Pamin had its own storage tanks and that he had checked the company’s records and ascertained that the cargo for the plaintiff had been stored in those tanks. Pamin had given the plaintiff a rebate on the storage claim of US$24,534.95 which reduced these charges from US$51,750 to US$27,215.05. The latter sum translated to a rate of US$4.73 per mt which the plaintiff submitted was not high compared with the storage charges of Pacoil and the evidence of what those charges generally would be according to the defendant’s expert Mr Shah. I accept the plaintiff’s contentions and agree that it is entitled to recover the full sum of US$27,215.05 paid to Pamin in respect of the storage cost. This amount cannot be apportioned as the charge levied was in respect of the quantity of the cargo and not in respect of how long it remained in the tanks after 15 January 2004.

103. Next is the claim for reimbursement of the amounts paid to Pacoil. Pacoil sent the plaintiff four debit notes on 13 February 2004. The first debit note was for the sum of MYR$213,750 and was in respect of storage charges for palm oil and palm kernel oil. The second debit note was for the sum of MYR$189,736.90 and comprised MYR$91,200 as reprocessing charges, MYR$79,800 for transportation for reprocessing charges and MYR$18,736.90 for shortage of cargo during transportation. The third debit note was for heating charges in the sum of MYR$45,600 and the final debit note was issued in respect of interest charges and was for the total sum of MYR$109,548. On 22 November 2005 the plaintiff sent Pacoil the sum of MYR$558,634.90 in total settlement of all the debit notes.

104. Syed Mohammed Shoaib Sabri from Pacoil testified that the contracts between the plaintiff and Pacoil for the sale of 3,000 mt of palm oil and 750 mt of palm kernel oil were subject to the PORAM terms. The contracts provided for the goods to be shipped from Pasir Gudang between 15 December 2003 and 10 January 2004. The plaintiff had nominated Asia Star for shipment of the goods between 1 and 7 January 2004 but when the vessel did not arrive by 9 January 2004, Syed Mohammed put the plaintiff on notice that Pacoil would not be responsible for any deterioration in the quality of the cargo. On 14 January 2004 he further told the plaintiff that Pacoil reserved its rights to charge the plaintiff for the heating and storage charges as well as interest and other costs consequences arising from the delay of the vessel. Pacoil was later informed that the cargo would be shipped by Chembulk Barcelona between 5 and 12 February 2004. Consequently, in early February 2004, the plaintiff arranged for the sample testing of the palm oil cargo to determine whether it conformed to PORAM specifications. The test results showed that due to the long period of storage it was no longer in compliance with PORAM specifications. As a result the cargo had to be transported back to Pacoil’s factory for reprocessing and heating to bring it back to specification. Syed Mohammed exhibited various documents indicating the tests done, the transportation of the cargo and the re-analysis after processing. Syed Mohammed also informed the plaintiff that all expenses relating to the reprocessing and storage of the cargo together with interest for late payment would be charged. Whilst the plaintiff had requested Pacoil to charge only the minimum charges, Pacoil maintained its claims and kept chasing the plaintiff for settlement until the money was received in November 2005.

105. First, I must hold that Pacoil was not entitled to charge the plaintiff interest at 18 per cent per annum as asserted by Syed Mohammed. That charge was not justified for the reasons I have explained above in relation to a similar charge levied by Pamin. The plaintiff should not have paid it and cannot recover it from the defendant. Pacoil could, however, have charged the plaintiff a penalty of 1 and a half per cent on the basis that the shipment was delayed by more than eight days. It did not do so, perhaps because the plaintiff had requested it on 12 January 2004 to waive the penalty charges due to the delay. If Pacoil had incurred interest costs as a result of the delay under clause 3 of the PORAM terms, it could have recovered those but there was no proof that it did and its claim was not related to any interest paid to any other party by reason of the delay.

106. As regards the charges for heating, transporting and reprocessing the cargo, as these resulted from the deterioration of the cargo due to long storage, I find that the plaintiff is entitled to recover the same.

107. The final item of Pacoil’s claim was the storage charges. The evidence of Syed Mohammed and RKN was that at the relevant time, Pacoil’s storage facility was used by the plaintiff to store cargo that it had purchased from Pacoil and that Pacoil charged the plaintiff a fee for the use of its storage facility. The fee would be included in the price of the cargo up to the time that the cargo was supposed to be shipped out but if the cargo remained in the facility beyond the contractual shipment date then additional storage charges would be levied. RKN confirmed that the plaintiff paid such storage charges because it was aware that Pacoil had incurred costs in setting up a storage terminal and was entitled to recover those costs by charging for the use of the facilities. Further, Pacoil was a separate entity from the plaintiff, although there were connections between the two companies, and the plaintiff had to deal with Pacoil as a third party. He confirmed that what the plaintiff paid for was what it had used and it did not pay the cost of the entire terminal regardless of usage. Pacoil bore the cost of maintaining the terminal and of storing its own cargo there. I accept the evidence and hold that the plaintiff is entitled to recover the storage charges.

108. The defendant had submitted that because Pacoil had not produced stock reports to cover the complete period by which shipment had been delayed, the plaintiff had not proved that its cargo had been in Pacoil’s storage terminal throughout that period. I reject that submission. The evidence was that at the material time Pacoil was selling cargo exclusively to the plaintiff and therefore any cargo that it was holding in its terminal for a purchaser was being held for the plaintiff. The stock reports showed when the cargo came into the tanks and when it was moved out of the tanks for reproc essing and then put back into the tanks to await shipment. Pacoil’s evidence was that this cargo was held for the plaintiff throughout. There was some gap in the documentation but it was only for a few days and I do not consider the gap to be significant.

Опубликовано: 16.12.2009

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